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Parker Waichman LLP v. R.J. Reynolds Tobacco Co.

Florida Court of Appeals, Fourth District

October 2, 2019

R.J. REYNOLDS TOBACCO COMPANY and LINDA PURDO, individually and as Personal Representative of the Estate of THOMAS PURDO, Appellees.

         Not final until disposition of timely filed motion for rehearing.

          Appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm Beach County; Cymonie S. Rowe, Judge; L.T. Case No. 502007CA024173.

          Alan J. Kluger and Michael T. Landen of Kluger, Kaplan, Silverman, Katzen & Levine, P.L., Miami and Bruce S. Rogow and Tara A. Campion of Bruce S. Rogow, P.A., Ft. Lauderdale, for appellant.

          J. Chris Bristow of Critton, Luttier & Coleman, LLP, West Palm Beach, for appellee Linda Purdo.

          Klingensmith, J.

         Parker Waichman LLP, a New York-based law firm organized as a limited liability partnership, appeals a final order discharging its charging lien in a tobacco litigation case. Rather than awarding the full amount of the contingency fee sought by the firm at the end of the case, the trial court ordered the firm receive attorneys' fees based on quantum meruit. For the reasons set forth below, we affirm the trial court's order.

         In November 2007, Parker Waichman hired Jordan Chaikin, a lawyer licensed and based in Florida, as an associate attorney to assist in screening Florida Engle[1] cases. At the time, Chaikin was the firm's only Florida attorney. Shortly after joining Parker Waichman, Chaikin filed suit on behalf of the estate of Thomas Purdo along with other Engle lawsuits. These cases remained mostly inactive until 2010, upon agreement of the attorneys, due to pending rulings from the appellate courts on various Engle-related issues.

         In 2010, the firm's managing partner Jerrold Parker received a letter from the Florida Bar concluding that Parker Waichman was engaging in the unlicensed practice of law by operating a Florida office without having a licensed partner in the state. The Florida Bar determined that Mr. Parker was holding himself out as a licensed attorney in marketing materials disseminated in Florida without the required limiting jurisdictional language indicating he was not a member of the Florida Bar. Subsequently, both Mr. Parker and the firm agreed that they would change their business operations to comply with the Bar's requirements.

         Parker Waichman subsequently named Chaikin as a partner in its Florida office. In fact, Chaikin remained the only lawyer in the firm's Florida office. Although Chaikin's agreement with the firm described him as both a "profit partner" and "supervisory partner," Chaikin was not allowed access to the financial information or capital of the partnership, and could not vote in partnership matters. Despite being described as a "profit partner," his salary was determined by the managing partners, he did not share in the firm's profits, and continued to receive compensation as a salaried W-2 employee entitled only to discretionary bonuses. Chaikin stipulated that he was a partner and referred to himself as such, but the evidence showed that Chaikin was never an equity partner of Parker Waichman and his role within the firm did not materially change with the new designation.

         In 2011, Chaikin invited attorney Alex Alvarez to his office to review Parker Waichman's pending tobacco cases. Alvarez agreed to serve as co-counsel with Parker Waichman on a few of these cases, including Purdo's case. Accordingly, Linda Purdo executed a new contingency fee agreement on behalf of the estate with the Alvarez Law Firm, Parker Waichman, and an appellate lawyer using Alvarez's form agreement.

         Towards the end of 2015, Chaikin resigned from Parker Waichman to start his own firm. Parker Waichman sent Ms. Purdo a client departure letter advising her that she had the right to do one of three things: 1) have Parker Waichman and The Alvarez Law Firm continue to represent her; 2) have Chaikin represent her; or 3) elect to retain new counsel. Unhappy with the letter's limited and rigid options, Ms. Purdo indicated she wished to retain Chaikin but added "and the Alex Alvarez Law Firm," clearly choosing Chaikin and Alvarez and terminating her relationship with Parker Waichman. The trial court then issued an order substituting Chaikin as counsel for Ms. Purdo and relieving Parker Waichman. In March 2016, once Parker Waichman was terminated, the firm filed the charging lien at issue in this case.

         The Purdo case went to trial in April 2016. According to evidence provided to the court, most of the trial preparation took place from January 2016 up until the day of trial with Chaikin involved in many aspects of it. Chaikin was also significantly involved in several matters during trial even though Alvarez admittedly handled the bulk of the trial work. The trial, which lasted almost a month, resulted in a verdict in favor of the Purdo estate for $33.5 million. As a result, Chaikin was entitled to a contingency fee of $4, 223, 700.

         After the verdict was upheld on appeal, Parker Waichman began litigating its charging lien and asked the trial court to award it the full contingency fee to be paid to Chaikin. At the three-day evidentiary hearing, Parker Waichman submitted that the firm worked a total of 116 hours on the Purdo case with cost disbursements totaling $17, 803.88. Consistent with Parker Waichman's time records, Chaikin agreed that he spent between 100 and 120 hours on the Purdo case while employed by Parker Waichman, and that his hourly rate while employed at the firm was between $500 and $650 per hour.

         After the hearing, the trial court awarded Parker Waichman attorney's fees of $75, 400.00 based on quantum meruit (116 hours at a rate of $650 per hour) and costs of $17, 803.88 for a total of $93, 203.88 which the parties agreed would be paid from Chaikin's fee. The trial court also ...

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